President Trump announced a new trade deal with Canada and Mexico Monday that is intended to replace NAFTA, the 24-year-old trade agreement that regulates roughly $1.2 trillion worth of trade between the North American countries. Assuming it passes Congress, the United States-Mexico-Canada Agreement, or USMCA, is expected to take effect starting in 2020.
Bloomberg’s David Fickling says that the new agreement isn’t all that different from the old one and includes elements that will be welcomed by the “globalists” who promote the expansion of world trade.
"The U.S.-Mexico-Canada Agreement, clinched just before a midnight deadline on Sunday, reads more like an amalgam of the existing Nafta along with certain provisions from the 12-nation Trans-Pacific Partnership that Trump pulled the U.S. out of on his first full working day in office," Fickling writes.
Here are five key provisions in the agreement:
* Dairy: Canada eased pricing rules in one category of dairy products, opening the door for U.S. farmers to ship more powdered milk, protein concentrate and baby formula across the border.
* Autos: Starting in 2020, 75 percent of the components in cars coming from Mexico and Canada must be made in North America in order to qualify for zero tariffs, an increase from the current 62.5 percent. Additionally, 30 percent of the work on a vehicle must be done by workers earning at least $16 an hour. The agreement also contains “side letters” that allow Canada and Mexico to escape most auto tariffs in the future.
* Steel: The Trump administration has hit Canada with 25 percent steel tariffs, which the new agreement leaves in place, to be negotiated separately.
* Labor standards: Mexico is required to provide workers with better opportunities to organize and form unions.
* Prescription drugs: U.S. drugs will receive 10 years of protection from generic protection, up from the current eight years, in what is seen as a big win for Big Pharma.